Restricting Trade in Resource Access: Consequences for Foreign Direct Investment in Seafood Processing

Abstract

A global market has developed for access to fishery resources. Coastal nations compete with each other to supply fishing opportunities to distant water fleets; the latter vie with each other on the demand side. A consequence of this international trade in resource access is the current distribution of cooperative fishing arrangements. The market is not free of trade restrictions, however. Some nations, including the United States, participate on the demand side but, through denying fishing opportunities to foreigners, not on the supply side. One consequence of these restrictions appears to be foreign direct investment in the seafood processing facilities of some coastal countries. The situation is similar to the case of exporting countries that, faced with import tariffs, participate in “tariff hopping” by investing in the processing sector of the importing country. Similarly, distant-water nations may find it to their advantage to invest in seafood processing abroad if they are provided only limited opportunity to participate in the fishing activity. We explore this hypothesis as a possible explanation for the significant role being play in the U.S. seafood sector by, among others, Japanese companies. (Click here for paper)

Source: Lemieux, J., Queirolo, L.E., and R.S. Johnston. 1998. “Restricting trade in resource access: consequences for foreign direct investment in seafood processing.” In: A. Eide and T. Vassdal, eds., Proceedings of the Ninth Biennial Conference of the International Institute of Fisheries Economics & Trade, July 8-11, Tromso, Norway. Tromso, Norway: Norwegian College of Fishery Science.

For more information, please contact: Lew.Queirolo@noaa.gov